"Google and MPEG LA announced today that they have entered into agreements granting Google a license to techniques that may be essential to VP8 and earlier-generation VPx video compression technologies under patents owned by 11 patent holders. The agreements also grant Google the right to sublicense those techniques to any user of VP8, whether the VP8 implementation is by Google or another entity. It further provides for sublicensing those VP8 techniques in one next-generation VPx video codec. As a result of the agreements, MPEG LA will discontinue its effort to form a VP8 patent pool." The word that stood out to me: the auxiliary verb 'may', which has a rather low epistemic modality. To me, this indicates that this is not so much a clear-cut case of VP8 infringing upon patents, but more a precautionary move on Google's part.

After today, it's no longer free. Or at least for Google and the sublicensees. Anyone else is still under legal threat.

What are you babbling about?

This agreement allows for Google to sublicense the techniques to any user of VP8, whether the VP8 implementation is by Google or another entity; this means that users can develop independent implementations of VP8 and still enjoy coverage under the sublicenses.

Google intends to license the techniques under terms that are in line with the W3C’s definition of a Royalty Free License. This definition can be found here: http://www.w3.org/2001/07/SVG10-IPR-statements We anticipate having the sublicense ready in the next few weeks. The terms will appear on the WebM Project website at http://webmproject.org

By using vp8 you become a sub-licencee, under the terms of w3c's royalty free licence.